• Abstract and Figures
• Public Full-text

STRAYEREDUCATIONINC. 2007 Annual Report O UR H ERITAGE Reprinted from Strayer’s 1912 student catalog This catalog was written with a view of setting before the men and women of this community some of the advantages of a business education, and of acquainting them with the superior facilities of this school for giving high-grade business training. The courses have been designed and presented to meet the needs of the business office of today. The teachers are men and women who are specialists in their respective subjects. The school rooms have been chosen and equipped with special reference to light, comfort and sanitation, so as to make it an ideal place for study. We ask that the public, in determining which school it shall attend, to consider the facts in connection with this school, as are outlined in this catalog and supplementary literature. It is twenty years old. It has grown steadily since the beginning. It attributes its growth to correct ideals, careful management and successful, enthusiastic, and rapidly increasing alumni. While it is essential to its success that a school should give thorough instruction in the subjects that comprise its courses, yet the school that does only this, falls short of its full mission. The development of those traits of character which make for reliability in business and good citizenship are the peculiar province of the school as well as the home. This school, then, has nothing in common, can have nothing in common, with those so-called business schools offering cheap and superficial courses. Such courses, while inexpensive, and possibly of short duration, cannot result in anything but disappointment in the end. This school, then, stands for high ideals, it courts investigation, welcomes comparison, and stands by its promises. It is a school to which you may attend with the knowledge that you will be in pleasant surroundings, will be accorded fair treatment, and will be given thorough and painstaking instruction. Finally, in presenting this catalog, we want to thank a discerning public for its support, and assure it that we shall endeavor to continue to merit the bountiful confidence it has heretofore placed in us. Strayer’s Business College circa 1912 O UR B USINESS M ODEL Reprinted from Strayer’s 2001 Letter to Shareholders trayer Education, Inc. is an education services holding com- Two of the attractive attributes of our business are that it gen- Spany whose primary asset is Strayer University, a 116 year erates significant after-tax free cash flow from operations, and old institution of higher learning focused on educating working that it has a high return on invested capital. The required capital adults. In this letter, when I use the term “Strayer”, I am refer- expenditures to keep our existing assets functioning are roughly ring to the company, as opposed to the University. Strayer equal to our depreciation expenses. The investment capital University, founded in 1892, offers associate, bachelor’s, and required to fund our growth initiatives is not major.This invest- master’s level degree programs in Business Administration, ment capital includes traditional GAAP defined capitalized Accounting, and Computer Information Systems, Education, expenses, as well as increased spending which runs through our Health Services Administration and Public Administration. income statement. We are therefore in the enviable position of Strayer serves students at 55 physical campuses in Maryland, generating almost our entire net income as distributable free the District of Columbia, Virginia, North Carolina, South cash flow, even after investing in our growth. Some of this cash Carolina, Tennessee, Pennsylvania, Georgia, Florida, Delaware, we do distribute back to our shareholders as dividends. The rest Alabama, Kentucky and New Jersey. In addition, Strayer serves of the cash we intend to maintain as liquidity to either fund students in all 50 states and more than 60 foreign countries world- new opportunities, or ultimately return to our shareholders in a wide on the Internet through Strayer University Online. tax efficient manner. We understand that the redeployment of this cash is crucial to creating shareholder value. Strayer’s revenue comes from tuition payments and fees paid by, or on behalf of, Strayer University students. That revenue As both shareholders and management, we are excited by this comes in essentially three forms. Roughly half is paid through business model because we believe that the value of a college federally insured student loans by banks, approximately 20% is degree is rising with the transition to a knowledge economy, and paid directly to Strayer by corporations or institutions on behalf that working adult students in search of an accredited college of their employees who attend Strayer, and the remainder is degree are underserved. We know that Strayer’s academic quality paid by students through their own sources of credit. and convenience make it ideally suited to meet this growing demand. We have the right product, at the right time for a Strayer’s expenses include salaries paid to the faculty at the growing market. Our product, a quality college degree, is valued University who perform the teaching duties, salaries paid to the highly both by students and employers. administrative and admissions staff who manage the campuses and recruit the students, and salaries paid to the corporate staff In 2001, we developed and committed to a new strategic plan, who manage the company’s affairs. Expenses also include lease geared to expanding beyond our current regional focus to serve payments for the campus buildings we lease and depreciation unmet nationwide demand for working adult post-secondary for the campus buildings we own, as well as advertising and education. This plan consists of five elements: marketing costs which serve to attract prospective students to Strayer. Finally, our expenses include supplies; such as books, — Reversing what had been a decline in the enrollment in our paper, pencils, desks, chairs and computers necessary to support core mature campuses. the educational process. Some of the furniture and electronic equipment is capitalized on our balance sheet and the expense — Accelerating the addition of new campuses, by opening is recorded as amortization over the period we expect the two to three per year, particularly beyond our current equipment to last, in accordance with generally accepted geographic scope. accounting principles. — Investing in our online university. The difference between the revenue we take in and the expenses we pay out is used to first pay taxes and is then added to the — Maintaining strong alliances and outreach to the major after-tax income generated by our financial assets (cash and employers of our students. marketable securities on our balance sheet) to make up our reported net income on a fully diluted basis. — Carefully screening opportunities to reinvest capital back into the sector through acquisitions. 1 O UR R E S U LT S Student Enrollment: Fall Quarter Revenues* 50 350 40 280 30 210 20 140 10 70 27,300 $78.2 $92.9 $147.0 $183.2 $220.5 $318.0 23,500 31,400 $116.7 36,100 $263.6 12,000 14,000 16,500 20,100 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 Operating Income* Net Income* 100 75 80 60 60 45 40 30 20 15 $30.9 $41.2 $52.9 $65.5 $74.9 $21.7 $22.8 $25.8 $33.7 $41.2 $48.1 $52.3 $64.9 $33.5 $79.5 $97.6 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 Earnings Per Share (diluted) 5.00 4.00 3.00 2.00 1.00 $1.41 $3.61 $2.74 $3.26 $1.55 $1.78 $2.27 $4.47 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 *Dollar amounts are in millions 2 L ETTERTO S HAREHOLDERS R OBERT S.S ILBERMAN Chairman & Chief Executive Officer Dear Fellow Shareholder, n this letter I would like to update you on Strayer Education shareholders IEducation’s progress over the past year, as well as share owe Kristin, and her team, with you our plans for 2008. First, however, you will find an enormous debt of grati- on page 1 of this annual report an excerpt from my initial tude for their hard work. letter to shareholders written in 2001. This excerpt describes what our company actually does; how our busi- We serve students in geog- ness model generates both reported net income and dis- raphies in which we do tributable cash flow for our shareholders; and finally, our not operate physical cam- strategy for increasing the value of Strayer Education. puses through our Global Shareholders who are new to Strayer, or those long term online unit. During 2007 shareholders who would like to review our strategy and this unit grew by approxi- business model (neither of which has changed since 2001), mately 24%, increasing to may wish to read the excerpt on page 1 before reading this nearly 4,000 students for the Fall term. Of course, we letter. Factual updates in the excerpt are italicized and make our online courses available to all of our campus reflect our growth since 2001. based students as well. Indeed, by year end over half of our more than 36,000 Strayer University students had taken In 2007, we continued to grow our main operating asset, some, or all, of their classes online. As I have described in Strayer University. For the second consecutive year we suc- previous letters, we view our online academic offerings as cessfully opened eight new campuses, which brought our an integral and fully integrated part of Strayer University. total number of campuses in operation to 51.

Load more

  15

Copy Link